Scenario-Based Satisficing in Saving: A Theoretical and Experimental Analysis
Contrary to the models of deterministic life cycle saving, we take it for granted that uncertainty of one's future is the essential problem of saving decisions. However, unlike the stochastic life cycle models, we capture this crucial uncertainty by a non-Bayesian scenario-based satisï¬ cing approach. Decision makers ï¬ rst form aspirations for a few relevant scenarios, and then search for saving plans satisï¬ cing these aspirations. In addition to formally specifying scenario-based satisï¬ cing in saving, we explore it experimentally. The results conï¬ rm that optimal intertemporal allocations are diffcult to derive, and suggest that satisï¬ cing allocations can be reached easily when aspirations are incentivized.
|Date of creation:||22 Aug 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Carl-Zeiss-Strasse 3, 07743 JENA|
Phone: +049 3641/ 9 43000
Fax: +049 3641/ 9 43000
Web page: http://www.jenecon.de
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2007-049. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markus Pasche)
If references are entirely missing, you can add them using this form.